Employee satisfaction in TCS is higher than peers: UBS

In its latest research report, UBS says that employee satisfaction in TCS is higher than its peers, bucking industry trends.

UBS has a buy call on the TCS share with a target price of Rs 2,800. (Image:Reuters)

In its latest research report, UBS says that employee satisfaction in TCS is higher than its peers, bucking the general industry trend. Peers such as Infosys and Wipro have seen very high attrition rates in the recent past. In Infosys, attrition rate increased year-on-year (YoY) as a total of 37,915 people left the company in FY17 as compared to the year before.Consolidated attrition rate from the company was at 19.2% for the year ended March 2017 as against 18.7% for the year ended March 2016.

The UBS research report has a buy call on the TCS share with a target price of Rs 2,800. TCS shares were trading at Rs 2,512, up by nearly 1% since the previous close. The research firm says that lack of internal challenges could help the company in gaining market share.

Infosys is battling internal crises like never before. Infosys is yet to recover from the deep wounds inflicted on it in the battle of values between its promoters and its former management and board members, leading to the exit of Vishal Sikka. The shares have plunged more than 10% in the last one month. While the BSE IT index has returned negative 2% in the year so far, TCS shares are up by more than 5% in the year.

Further, the research report says that TCS is best placed to address the transformation to digital services.In the wake of Vishal Sikka’s sudden resignation, some investors had feared that Infosys might face a loss of clients as well, especially those brought in by Sikka on the basis of his personal rapport. Previously, in the run up to Vishal Sikka’s resignation, Infosys has already seen an exodus of several of its other top executives.

Nandan Nilekani had indicated that India’s second-largest software services firm would embark on a global hunt for its next chief executive officer. Outlining the attributes required for the next CEO Nandan Nilekani had said in an investor concall, “The right candidate will demonstrate excellence in a challenging global environment, show technological prowess, is comfortable with the firm’s cultural transformation and more importantly, aligns well with the ideas of the stakeholders.”